Consumers and Stocks

January's consumer confidence figures, released yesterday, came back very disappointing, dropping to its lowest level since last April when analysts were expecting only a slight dip. The markets also had a bad day, with the Dow losing 100 points and the S&P 500 and Nasdaq both losing ground as well.

Naturally, the media tied the two events together (one Bloomberg headline read: "Weak consumer confidence data hammers US stocks"), and possibly there is a connection. At the same time, let's take a look at the individual Dow stocks. Three of the 30 Dow components actually rose yesterday: Kraft Foods, McDonald's, and Home Depot. The other 27 lost value, with the biggest losers (on a percentage basis) being Alcoa, JPMorgan Chase, American Express and Caterpillar.

So three consumer-oriented stocks did the best, and the laggards were two financials and two heavy-industry companies. Many things affect the movement of stocks prices each day; sometimes it is the day's biggest overall economic news, and sometimes it is not.